Why Projects Fail
By Greg Galluzzi, President (April 2004)

There are many reasons why a CIS initiative fails, the following areas of risk have been identified and presented for consideration.

CIS is not a proven solution.
The industry has moved from the implementation of custom developed solutions, to the use of design guides or codeware customized specifically for the utility, to product solutions with an 80 percent to 90 percent product fit. In today's market a primary requirement is for the CIS product to be installed at a minimum of one utility similar in size and services provided. Those utilities selecting products still in development or immature products with a minimal installed base have increased their risk exponentially of extended implementation timeframes, cost overruns, functional deficiencies, and in worst case scenarios outright project failures.

Poor contract, scope and responsibilities.
A major source of project confusion can be attributed to poor contract language, unclear scope definition and undefined responsibilities. Many times the installation effort is initiated without the identification of the project components necessary for a successful implementation effort. In other instances, components or constructs may have been discussed but never adequately documented and agreed to. During the implementation effort the phrase “I assumed you were doing that.” is a strong indicator that insufficient time was spent in defining project scope and specific responsibilities.

Unrealistic expectations, timeframes and poorly defined costs.
Closely associated with second item, contracting parties frequently enter the installation phase with unrealistic expectations of the other party. This is why it is so important to perform an adequate level of due diligence during the evaluation and selection effort. In a number of efforts reviewed by TMG, project timeframes and identified costs did not adequately allow for successful installation of the defined solution. Many times project costs and associated project risks are minimized in order to obtain approval for the installation effort only to require subsequent funding requests.

Lack of available vendor resources.
Today's level of CIS market activity is significantly down compared to recent years. As a result, layoffs, early retirement, etc., have left many vendor's struggling to adequately staff projects with knowledgeable product resources. A number of vendors have attempted to solve this problem by forming relationships with Solution Integrators (SI) to supplement staff. However, the use of SI's comes at a higher price tag resulting in the utility paying high hourly rates for inexperienced product personnel. On the other side, a few vendors continue to rely on internal consulting groups to provide necessary project services. These groups are spread very thin especially among fast growing CIS vendors with sales quickly outpacing available resources.

Poor handoff from vendor sales to vendor operations.
Unfortunately, most selection efforts and final contract negotiations are conducted with vendor sales personnel. Many times the details of the agreed upon solution are never reviewed by vendor personnel responsible for the installation effort. As a result, solutions are negotiated which the vendor is not capable of fulfilling and projects are planned and initiated which do not reflect the negotiated solution and utility expectations. Vendors are beginning to add operational personnel to their sales teams and require extensive review and approval throughout the organization for new sales contracts. However, the issue remains a significant problem.

Customize rather than configure system.
For a utility to successfully implement and fully realize the ongoing benefits of a product solution it must minimize customization work. Vendors continue to enhance product flexibility through configuration capabilities. Unfortunately, many utilities require the product to conform to utility specific business requirements and processes. The utility should only consider initial customization around required rates and tariffs. All other customization should be delayed until the system has been used in production. Utilities are modifying business processes, rules of service, meter configurations, and even rate structures as necessary to utilize the software. Every customization or interface included within project scope increases the work effort and associated project risk.

Utility does not dedicate project resources.
The utility tends to place all blame on the vendor for project troubles. In reality, both the vendor and the utility are the source of problems. One of the biggest issues which the utility faces is the inability to adequately staff project positions with qualified business and technical staff. Historically, TMG has seen part-time assignment with staff members still responsible for production work or the utility assigns it's most inexperienced or ineffective people to the project. More and more utilities are waking up to the issue and backfilling for key personnel allowing them to be dedicated to the project.

System is placed into production before its ready.
The biggest downfall of any project is the implementation of a system which is not ready for production. At a workshop attended by 30 utilities who recently implemented a CIS solution all 30 indicated they had implemented their system before it was ready and did so to meet Executive/Board/Council expectations around a go-live date which had been promised at the time the solution was approved. While not as common there is another extreme where a utility delays implementation until the system is 100 percent complete—obviously this never occurs and the system is never implemented.

Users and customers not prepared. The project team and certainly the vendor is focused on the design, configuration, testing and implementation of the new solution. Training and communication becomes the responsibility of the utility and is usually under funded, under estimated and under delivered. User acceptance testing never occurs, user classroom training is limited without mock production, refresher, or ongoing education activities, and customer communication is limited to a single bill insert notifying them of the new system. It is the curse of most projects that while they are technical achievements they are business failures with extensive resistance, business process issues, education issues, and customer confusion.

Lack of executive involvement. The biggest underlying reason most projects fail is the lack of strong executive involvement and support of the project during its entire life-cycle. Most efforts are initially approved by the executive team with their involvement not occurring again until additional funding is requested, timeframes are extended, or project success is placed in jeopardy. Usually executive communication and support for the project occurs at the highest levels in the utility and never effectively filters down to the staff level. This lack of communication usually fuels staff resistance or a perception of “This system will never be placed into production so why worry about it.” syndrome which undermines staff participation and buy-in to the solution. Executive involvement is more than a once a month status report it is daily interaction, visibility and commitment by key executives to the success of the effort.

The Bottom Line
In one instance a CIS product solution is successful and in another instance that same product is a failure. Each project represents a unique environment of people, politics, objectives, internal pressures, external pressures, etc., which all contribute to varying degrees of risk. The bottom line is that any CIS effort is a risky venture and must be approached as such.

Greg Galluzzi is the President and Senior Consultant with TMG Consulting. Greg has 25 years of information technology, and consulting, experience across 200 CIS projects. experience across 200 CIS projects. Greg can be reached at gregg@tmgconsutling.com.